NJ Ordered To Restore Millions In State Aid Cuts After Jersey City Complaint

JERSEY CITY, NJ — The U.S. Department of Education has ordered New Jersey to restore millions in state aid cuts from this year's state budget. The cuts, the USED said, violate the Maintenance of Equity provision in the American Rescue Plan Elementary and Secondary School Relief Fund.

The USED's order was prompted by complaints from Education Law Center and Jersey City Together, a coalition of more than 30 religious congregations, nonprofits and parent groups affiliated with New Jersey Together.

The USED penned a letter to Acting Commissioner of Education Angelica Allen-McMillan on Nov. 24, alerting the state to restore the funds immediately, the letter reads in part:

"The Department would expect that a State could remedy any under-allocation to a highest poverty LEA by allocating an additional amount of funding that would satisfy both maintenance of equity requirements in section 2004(b)(1) and (2) of the ARP Act. In other words, we expect that “two separate pools of funding” would not be necessary, as long as all maintenance of equity requirements are met by a single pool."

The American Rescue Plan Elementary Secondary School Relief Fund entitles New Jersey to $2.5 billion in federal emergency relief funds, but that funding is dependent on compliance with the Maintenance of Equity requirement. New Jersey’s FY22 Budget included cuts in state aid to districts in both the “high need” and “highest poverty” categories as defined by the American Rescue Plan Elementary Secondary School Relief Fund.

“This directive from the federal government should come as no surprise,” said Danielle Farrie, Education Law Center Research Director. “It was clear that the aid cuts in the FY22 Budget put New Jersey out of compliance with the ARP ESSER, which specifically prohibits states from reducing state aid to high poverty school districts.”

The state aid cuts were dictated by Senate Bill 2, a change to New Jersey’s school funding formula enacted in 2018, phasing-out “adjustment aid,” a category of state transition aid. Despite a warning from ELC that the S2 cuts would violate the Maintenance of Equity in certain districts, the FY22 Budget proposed by Governor Phil Murphy and passed by the Legislature included the aid cuts. The budget also authorized a transfer of set-aside funds in the event New Jersey was found to be out of compliance with the Maintenance of Equity.

“The USED has vindicated the advocacy of Jersey City Together and ELC to enforce Maintenance of Equity” said Brigid D’Souza and Dr. Jyl Josephson, parent leaders with Jersey City Together, “The restoration of millions in state aid will be crucial for high poverty districts across the state, including Jersey City, to invest over the next two years in their students and recover from the pandemic.”

Jersey City Spokeswoman Kimberly Wallace-Scalcione expressed gratitude to those involved in pushing for the restoration and called on Governor Phil Murphy to act.

"We are thankful for Education Law Center and the decision from the Department of Education. From day one, we have said that Trenton is hurting the most vulnerable of families with cuts to school funding in Jersey City, and we are glad that this ruling has affirmed that position. We are now calling on Governor Murphy to act quickly in restoring these draconian cuts," she said.

Jersey City Mayor Steven Fulop applauded the decision on Twitter, calling it "a big win for Jersey City."

The ELC released estimates as to how much each of the over 80 New Jersey school districts is owed, with a cumulative $172,589,052. Jersey City's Board of Education could recover as much as $126,434,477.

Jersey City Board of Education President Mussab Ali called the decision a sigh of relief.

"This decision is a huge sigh of relief for the taxpayers in Jersey City who have been subjected to unfair cuts to the tune of $126 million. The Jersey City Board of Education has been working diligently with state and federal legislators to lobby for our students. We encourage the governor to act swiftly to restore funding to the Jersey City Public Schools."

Jersey City Public Schools Deputy Superintendent Norma Fernandez also praised the decision, highlighting that the district has enough issues with infrastructure and didn't need one more.

"The Jersey City Public School community is extremely grateful to the JC Together Team for the support and advocacy and working with the Educational Law Center on behalf of the students. The challenges of an aging infrastructure and disadvantage continue to plague many urban districts like ours. The decision is wonderful news."